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CANDY CROWLEY, HOST: Seven years and three months ago we thought it was over.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, 43RD PRESIDENT OF THE UNITED STATES: Major combat operations in Iraq have ended. In the battle of Iraq, the United States and our allies have prevailed.

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CROWLEY: This week, without banners or brass, the last remaining U.S. combat brigade rolled across the border into Kuwait with their own sense of mission accomplished.

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UNIDENTIFIED MALE: We're going home! We won! It's over!

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CROWLEY: Still, 50,000 U.S. troops will remain in Iraq, scheduled to be out by the end of 2011. The role of the U.S. military in Iraq is not over, but it's maybe closer to over.

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CROWLEY (voice-over): Today, after the drawdown, with the U.S. commander in Iraq, General Ray Odierno.

ODIERNO: Essentially we could be there beyond 2011.

CROWLEY: And three central players in the war, former chairman of the joints chiefs of staff, General Richard Myers; former Centcom commander, Admiral William Fallon; and former ambassador to Iraq, Zalmay Khalilzad.

Then former presidential candidate Howard Dean, the Democrat who won't just go along to get along.

HOWARD DEAN (D), FORMER DNC CHAIRMAN: People want change, and this is a problem.

CROWLEY: I am Candy Crowley, and this is STATE OF THE UNION.

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CROWLEY: To date more than 4,400 soldiers U.S. military men and women are, over 31,000 wounded, tens of thousands, perhaps hundreds of thousands of Iraqis have been killed, and millions more displaced.

In 2007, a dramatic shift in strategy in Iraq by former President Bush turned the tide, but it remains a fragile place. Five months after elections, Iraq is still a country without a government, power- sharing talks between the two major Iraqi political parties remain at stalemate.

Last Tuesday, there was a massive bomb explosion outside of a military recruiting center in Baghdad killing 48 people. An American soldier was killed today in Basra province. Still, U.S. officials insist Iraq is ready to take the lead in securing the country and form its own government. And this president claimed his own mission accomplished moment.

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BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We are keeping the campaign I made when I began campaigning for the presidency. By the end of the month, we will have removed 100,000 troops from Iraq and our combat mission will be over.

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CROWLEY: Earlier, I talked with the commander of the U.S. forces in Iraq, General Ray Odierno, in Baghdad.

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CROWLEY: General, thank you for joining us. I want to first define our terms. Withdrawing all U.S. combat troops from Iraq, all out by September 1, doesn't mean the end of combat involving U.S. troops in Iraq, does it? ODIERNO: No. It doesn't, Candy. What it means is our units that were organized to conduct combat operations has left. We now have units left behind that are organized to do advise- train-assist. But they certainly have the ability to protect themselves and if necessary to conduct combat operations if it was required. CROWLEY: Do you have contingency plans for various scenarios that may not come up but there is a possibility? A coup, a big attack staged somewhere, Mosul, or in Baghdad? Are there contingency plans for that? ODIERNO: Well, we always -- we work very carefully with the Iraqi security forces and we have several different contingency plans for support. But it would have to be something that would change the strategic dynamic here for us to move back to combat operations. CROWLEY: Can you define that for me? What's a strategic dynamic that could change? ODIERNO: Well if, for example, you -- you had a complete failure of the security forces. If you had some political divisions within the security forces that caused them to fracture, but we don't see that happening. They've been -- they've been doing so well for so long now that we really believe we're beyond that point. CROWLEY: So do you think now -- I know that the level of violence is down from its peak time when we were there, but nonetheless, there is still a level of violence there. Is that conducive to trying to put together a secure country, in particular a government, which in this instance the Iraqis still don't have? ODIERNO: Well, I think there's a progression that you go through. And obviously as you said, we're not at the levels we were at the highest levels. We're significantly below that. I think there's this -- the insurgency is suppressed. There's still terrorism that is occurring here. But I -- I will tell you that the country is moving forward. It's moving forward along every line. It's moving forward a little bit economically. Its security forces are improving. Its diplomatic efforts are improving. Its governmental functions are improving. So they're headed in the right direction. CROWLEY: Let me bring up one for instance that critics bring up when they say the Iraqi forces are just not ready yet, the security is just not there yet. You had the bombing at a recruiting center in Baghdad. Recruitment centers have long been a target of insurgents and yet, it was not protected. Isn't that a failure of -- of Iraqi security? ODIERNO: Well, what you have to do is you have to -- I always step back, and you have to look at the entire picture. Did we have a successful terrorist attack the other day in the recruiting center? Yes. We did. But I continue to see overall improvement in the security forces, in protecting the people. They've been able to limit many of the things that were -- were providing unsecure environment in years past. So there -- there's still always improvement that has to be made. CROWLEY: I guess the question here from the critics has been if -- if you have not secured a recruitment center in the center of Baghdad, what else isn't secured? ODIERNO: Well again, you know, in a -- in a country as large as Iraq you have many things that go on, thousands and thousands of things that go on every single day. And if you have an individual who's willing to blow himself up, willing to do anything possible to get access, it's very difficult to defend against. They are working this. It is not easy. CROWLEY: Will they be good enough for us to pull out the remainder of those 50,000 troops by the deadline of the end of next year? ODIERNO: My assessment today is they -- they will be. I think -- I think that they're -- they continue to grow. We continue to see development in planning, in their ability to conduct operations. We continue to see political development, economic development, and all of these combined together will start to create an atmosphere that creates better security.

And the Iraqi people are resilient. They want this. They want to have a democratic country. They want to be on their own. They want to move forward and be a -- a contributor to stability in the Middle East. CROWLEY: I want to read you a quote from Lieutenant General Zabari, who is chief of staff for the Iraqi Joint Forces, I'm sure you know him, something that he said in The Daily Telegraph. "If I were asked about the withdrawal, I would say to politicians the U.S. Army must stay until the Iraqi army is fully ready in 2020." Can you foresee a scenario like that, that there would be some U.S. military presence, albeit much smaller, at 2020? ODIERNO: Well I -- yes -- I think I don't know. I think it depends on what kind of presence you're talking about. If the government of Iraq requests some technical assistance in fielding systems that allow them to continue to protect themselves, some external threats, we could be here. I mean, you know, we have agreements like that in Saudi Arabia. We have agreements like that in Egypt. That continues to help them to develop their infrastructure and security architecture. And if that's what we're talking about, potentially, we could be there beyond 2011. CROWLEY: It has been five months since the Iraqi elections. They still haven't formed a coalition government. You have expressed hope that by September 1 they would be well on their way. Are they well on their way? ODIERNO: Well, first off, they're back talking again. They haven't broken off talks, so they're back discussing it. So that's a good sign. What -- what they're working on now is reforms and power- sharing agreements. And that's -- that's important. We want them to decide what reforms have to be put in place, what kind of power- sharing agreements they need in order to move towards governmental formation. And I all we're trying to do is facilitate that process. And we're starting to see movement forward. And I think that's encouraging. CROWLEY: Let me turn to Iran. We know that throughout this process, Iran has been involved at some level, certainly helping the Shia in the fight. What is the level, as far as you can tell, of Iranian involvement in Iraq, both in the government -- in trying to form a government and in the fighting that still exists? ODIERNO: Well, they -- they clearly still fund some Shia extremist groups that operate in Iraq. They train them. They continue to try to improve their capabilities, partially to attack U.S. forces, partially to make sure everybody understands that they can have some impact in the country. They clearly want to see a certain type of government that is formed here. CROWLEY: So is that Iran's ambition, do you think, in Iraq, to keep it from becoming a functioning democracy? ODIERNO: I think they don't want to see Iraq turn into a strong democratic country. They'd rather see it become a weak governmental institution, so they don't add more problems for Iran in the future. CROWLEY: Does the U.S. have forces "over the horizon," as they say, in case something big happens in Iraq that requires us to move back in? ODIERNO: Well, I would just say I think that we always have capabilities if -- if asked. And I think, you know, we want to be someone who can help them if they have problems.

ODIERNO: But that will always be up to Iraq.

CROWLEY: General Raymond Odierno, we thank you so much for your time. Good luck there. Welcome home when you get here. We appreciate it.

ODIERNO: Thank you, Candy, very much.

CROWLEY: Up next, we'll look at the lessons learned in Iraq from three men who helped shape the war.

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CROWLEY: Before our next three guests, a little about their roles in the Iraq war. Zalmay Khalilzad was the U.S. ambassador to Iraq from 2005 to 2007, respected for his skills in bridging sectarian differences. Born in Afghanistan, he studied in Chicago and became a U.S. citizen in 1984.

Four years ago, as the war grew increasingly unpopular, he wrote, "If we leave prematurely, it will have grave consequences for our interests, for Iraq and Iraqis, but also for the region and the world."

Admiral William Fallon, also known as Fox Fallon, was put at the head of U.S. Central Command during the Bush administration because of his reputation as a strategic thinker. Also known for being blunt and outspoken, Fallon abruptly resigned in 2008 over what was widely seen as his disagreement with the Bush administration over how to handle Iran.

He was quoted as saying, "I come from the school of walk softly and carry a big stick."

Air Force general Richard Myers served as chairman of the Joint Chiefs of Staff from 2001 to 2005. Near the end of his tenure, he said the United States must win in Iraq, because, quote, "the outcome and consequences of defeat are greater than World War II."

The general, the admiral and the ambassador join us when we come back.

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CROWLEY: Ambassador Khalilzad, Admiral Fallon, General Myers, thank all three of you for joining me. I want to hop right into this. Because, General Odierno said, yes, he thinks the Iraqi military is ready for the U.S. to change its mission, essentially, to begin to withdraw the combat troops, with the last combat brigade. Is it?

KHALILZAD: Well, I think it is, in terms of the current circumstances. Because we still have 50,000 troops. That's a lot of power that we still have on the table there.

The question for me is whether, next year, withdrawing the entire force, with some residual training elements, perhaps, remaining, whether the Iraqis will be ready then. And I believe that's a tall order. But as of now, for this phase, I believe that the Iraqis can, with the forces that we have, handle the situation.

CROWLEY: So let's push it to the end of 2011, which is when the 50,000 are supposed to come back out. And I want to read you something that was in The Washington Post this morning from the Iraqi foreign minister. It's a quote.

"In Washington I told them it would be embarrassing if you left and there is no government in place. The U.S. will still have a substantial force here, but it needs to use it to produce results. The Iraqi leaders are at an impasse and we need help from our American friends."

This is not a stable country, is it?

MYERS: Well, I think it's becoming more and more stable every day. We've got the political impasse right now. But assuming they work through that, then the trend lines are -- are up. And I would just say, you know, there is never a perfect time to leave a situation like this. But I think General Odierno said it -- said it right, that we have been working for six years to train Iraqi troops, and it's -- there has been peaks and valleys in that, and successes and some setbacks, but we are, six years down the road, in a process that General Petraeus actually started in 2004 and 2005.

And so I would take General Odierno's word that we're -- we are ready for that. And I think we just have to -- at some point, the Iraqis have to be responsible for their -- their own situation. And maybe this will be impetus for the Iraqis to go ahead and finish their -- their political debate.

CROWLEY: Is that part of what's going on, is that we really do need to push the Iraqis because otherwise we'd be there in large forces for some time?

FALLON: Well, Candy, I think this milestone is part of an ongoing evolution in accordance with the security agreement that we reached with the Iraqis a couple of years ago. Iraqi security forces have largely been responsible for internal security for some time now. They are not particularly ready for external security, and that's a major factor.

CROWLEY: And that's the 2011 problem, right... (CROSSTALK)

CROWLEY: ... can they protect their own borders?

FALLON: But I think it's really in our interests, and I think in the interests of the Iraqis, that we continue a relationship with them. For example, the Iraqis have made a decision to buy U.S. equipment, tanks and airplanes and a lot of other things that are very important to them. And they are going to need our assistance as they transition to this more complex equipment.

And frankly, the mission that our folks are undertaking right now, training and advising and helping, is one that we in fact conduct all over the world, in varying numbers, in different places. So I think that it's in our best interests to continue to walk and work with the Iraqis as we move forward.

KHALILZAD: The politics is extremely important now, and this government formation is very important. This has the potential to repolarize the situation in Iraq...

CROWLEY: The withdrawal, the beginning of the U.S. withdrawal?

KHALILZAD: If politics doesn't go well; if the Iraqis don't come together to form a government -- and we have a vital role, in my view, to help facilitate an agreement between the key Iraqi political parties. Because we have a lot at stake, in terms of the security impact if politics don't go well. And it has taken too long for a government to be formed.

KHALILZAD: It's in part, of course -- or largely the fault of the Iraqi political leaders that have not managed to come together on a power-sharing formula. But I think it's imperative for us to be as helpful, as engaged to facilitate -- for the bridging formulas, spending a lot of time with them to bring them together, because without that, the security gains we have made could be put at risk. Already, you see some indications of that.

CROWLEY: And you do, and what I have a sense of is that this is a country that's either on the verge of getting its act together or on the verge of falling apart again.

And we are hearing from the streets -- we talked to some of our reporters who are there now; I've read a lot of articles, as I'm sure you all have, about some real fear in Iraq, right now, that the Americans are leaving, and that they feel that this sectarian violence will be on the upswing.

I want to read you something from a Kurdish legislator who told the L.A. Times on Friday, "Some people think it's a run-out, an irresponsible withdrawal. This is about what's going on in America, not about what's going on on the ground."

Could you speak to that fear that the Iraqis have?

FALLON: Candy, I think that, within that population, just as in the U.S. or any place else, you're going to have a wide range of opinions. Some people are anxious to see us gone completely, for reasons that they have been trumpeting for some time. others would like us to stay forever. And the majority of people, I believe, are somewhere in the middle, and they are -- they're nervous; they're anxious; they're fearful that things could degrade back into the situation as it was in '06 or early '07. And I think that's all the more reason why we need to be, kind of, study as she goes.

We have an agreement. We're working through that agreement. We want to be with them. As the ambassador said, they need a lot of help in this political process because this is all new to them. There are people that took orders from the top and had no say, and if they opened their mouths, they were dismissed, at best.

And so they're going to need a lot of help and encouragement. In my observation, during the time that I worked with them closely, sometimes we'd get frustrated because progress seemed extraordinarily slow or nonexistent, and then there would be some kind of a deal made where they would agree to move forward. And so I think we have to work...

KHALILZAD: The timing is -- the timing is unfortunate. I can understand the Iraqi concern, because they don't have a government. Violence is picking up in some areas, and we are withdrawing, in their -- from their perspective, although in fact we are just withdrawing some units, and 50,000 is still staying there.

The question really is, the government formation. That's front and center. This is -- a lot is at stake here. If it works well in terms of not only a division of power between parties but the right people, competent people, nonsectarian people being appointed to the ministries of defense, interior, because if you have the wrong person taking control of those forces that we have established, that could create substantial problems.

So I would say it's all about politics right now, and if it goes right, it will put Iraq stronger on the right trajectory, but, God forbid, if it goes wrongly, the achievement that we have made could be put at risk.

MYERS: Yes, Candy, I think it's -- I think it's the uncertainty of the political process, right now, that causes the kind of comments that we hear from other Iraqis. It's just not knowing that they're going to be able to resolve the differences in a political way, as opposed to through violence.

And so I absolutely agree with the ambassador that the political process now, in bringing that together, is the most -- that's priority number one.

CROWLEY: The general, the admiral, the ambassador will be back with us when we come back. We're going to take a look at Afghanistan and discuss whether President Obama's strategy to send more troops there will pay off.

(COMMERCIAL BREAK)

CROWLEY: We are back with Ambassador Zalmay Khalilzad, retired Admiral William Fallon and retired General Richard Myers.

General Myers, to you, let me talk, in closing up the Iraq (inaudible), about Iran. Because I think, also, some of the U.S. worry and some of the worry on the ground in Iraq seems to be about the level of interference or involvement that Iran seems to have, both militarily and in the putting together or the keeping apart, an Iraq government.

Tell me the threat that Iran now poses in Iraq as we start to withdraw?

MYERS: Well, again, if -- I think part of what Iran will exploit is the political uncertainty and lack of political leadership inside Iraq right now.

And so they'll continue to do what General Odierno said they were going to do. They'll train; they'll provide weapons; they'll provide money; and they'll probably provide assistance to some political groups inside Iraq that have aspirations to political office.

So I think you'll see all of that. It think it's less than it was a couple of years ago. That's what I understand. But, nevertheless, they are active, and no doubt, they've created a danger for our U.S. forces and other international forces and diplomats that are in the country.

CROWLEY: But, Admiral, if I am in Iran and I have designs to keep Iraq weak, why don't I just wait until the end of next year when all the U.S. forces are gone and then just move in full throttle?

FALLON: Well, because there is a political process under way in Iraq that is slowly and haltingly but basically moving forward in a democratic way, that is not exactly what the Iranians would probably like to see. And so the longer this process goes on, the more opportunities that the Iraqis get to work with one another, the less chance they're going to feel dependent on the Iranians.

CROWLEY: Let me ask you a broader situation about Iran in the region.

Because as Iran apparently moves closer to getting nuclear capability, what we're hearing more and more is, will Israel take out a reactor, assuming there's just one and they can find it? Will the U.S. stage an attack?

Let's just assume that, in the end, that there is some sort of need to take out a nuclear reactor. What does that do to the region?

KHALILZAD: Well, first, Iran wants to dominate the region. And in Iraq, it would like to keep Iraq weak and keep us under pressure because it does not probably believe that we will leave altogether, so it wants to keep the pressure on us. That gives them leverage...

CROWLEY: And by keeping the pressure, you mean causing fatalities?

KHALILZAD: Fatalities. But as far as the nuclear issue is concerned, I think that there is high probability, in my judgment, that, if Iran was to come close to a nuclear capability, that there would be perhaps an Israeli attack on Iran, because Israel is so vulnerable to a single nuclear explosion that, although the probability may be low, the risk is so high, that it may be intolerable for them to accept it.

KHALILZAD: And I think Iran would react to such an attack clearly with assets that it has in place, whether Hezbollah in Lebanon against Israel, whether other forces in the region, in Iraq, in Afghanistan, against facilities and targets across the entire region.

So I think Iran will react to an attack, and it may have implications inside Iran, too, for the forces that are seeking to bring about a political change. They will come also under greater pressure, in my view.

MYERS: And I -- let me say, that I think it would also there would also be a backlash to U.S. presence in the region if Israel does strike, because the assumption will be, whether it's correct or not, that the U.S. approved of this. And so there will be a backlash against the U.S.

I think it would make a Middle East peace process much more difficult to come to some sort of conclusion. I absolutely agree with the ambassador that Iran has lots of tools it can use. It controls basically Hezbollah and Hamas. Both of them could raise a lot of havoc with Israel, either through Lebanon or through the West Bank.

CROWLEY: Admiral, let me turn you to Afghanistan. All of you are quite familiar with that country as well. Eight years we have been in Afghanistan. Are you satisfied at this point there is a clear goal for the U.S. in Afghanistan and a military strategy that is getting us there? FALLON: Well, Candy, this has evolved, of course, during this period of time. And the circumstances right now are that we need to help them with security in some parts of this country, and basically to try allow the Karzai government to earn the respect and confidence of the people. And that's the key effort that's under way.

I don't feel that there is much chance of the Taliban taking over this country. The people of Afghanistan have had a dose of this in the past. They have seen it. They felt it. And the majority of them have made it very clear to me they don't want part of it again.

But they do have strongholds in the south. And we have -- due to the challenges in Iraq and other places, we have not had maybe the emphasis that we would have liked to have had in this country.

Now things are being brought bear. And I think we need to give them a little bit of time just to settle out. I think that this will be an ongoing process. But to my mind, the one thing that is really the key ingredient that needs to be added to the situation is a long- term economic viability plan for this country.

Iraq, for example, has lots of oil and gas, and everybody knows it. And it's just a matter of figuring out how to get it out and divide the resource. But in Afghanistan, we are not that far forward. And if the place is going to be viable in the long term, it needs to get off its dependency on a lot of well-meaning donors around the world and to move forward economically in a way that can sustain the people, give them confidence, and let them move to a future that is a lot less worrisome than now.

CROWLEY: Does it worry any of you that increasingly a lot of these -- well, in Iraq and in Afghanistan, we increasingly saw the military sort of doing State Department -- what would look like State Department things to do?

And we -- I talked to three former -- three vets who are now congressmen who said, you know, this nation-building, you know, getting people together for governments is really not what we were trained for. Does this worry you?

MYERS: It does. And I -- may I go, Ambassador? I think any counter-insurgency is eventually defeated through the applications of all instruments of power, not just military instrument, but the diplomatic, the economic.

We have been very good at the military instrument of power. And we've asked our military to do extraordinary things, things that they are not particularly well-trained for. One 21-year-old I met at Walter Reed said he was helping set up a town council. And I said, well, how were you trained for that? He said, well, I learned that in my civics lesson in high school.

Well, that's not -- and he was probably being effective. He said, in any case, I know a lot more about it than they do.

But that's not enough. We need -- you know, we need a lot of diplomatic effort here as well to help the political process along, because I would say militarily with the surge, I think we are making progress in Afghanistan.

It's the political progress that is developing a central government that can provide some services to the provinces that are not corrupt or has less corruption, those sorts of issues that have to be worked. So I absolutely agree with the statement.

KHALILZAD: I think the key thing there that is problematic, in my view, is, one, how do you end the sanctuaries in Pakistan? That's the Afghan-Pakistan relationship, which is big diplomacy that needs to be handled.

Then how do you have a working relationship with the president of the country of Afghanistan, Karzai, that you are working to solve the same issues with mutual confidence? A problem.

And I think the third political problem is that this is a country made up of many tribes and groups. And counter-insurgency, success in part depends on working the tribal relationship, which, again, is political.

I believe that without dealing with these three elements, success will be very difficult, especially given the demanding time line that the president has put in, which is July of next year, we will begin to withdraw, which itself has had a negative effect.

So I believe that politics is an increasingly -- particularly in the nation and state-building process, vital part of a strategy. And our ability to deal with it, we cannot rely on the military to do that. We need to develop diplomats and political operatives who can handle these situations effectively.

CROWLEY: Admiral, I'm going to give you our last 30 seconds here on that same subject. If you were to look forward to whatever might come next in countries such as Afghanistan or Iraq, where there has been heavy duty diplomacy by people who are trained as military men and women, would you say we either need to have a special part of the military that does this kind of nation-building, or, look, no more nation-building, you guys need to beef up the diplomatic corps?

FALLON: Well, Candy, I think that the reality is that in today's world, it probably has not been much different in many places than times in the past. Our military people, because they are expeditionary, because they are going to go forward and go to these lands that are troubled, have got to have a significant background and understanding of how to do these things.

We have a wonderful Department of State and other domestic departments here in the U.S. that are focused on this country. The number of people in State are very small compared to the military, and they are not in the expeditionary mode.

And so I think that there needs to be an understanding that there is going to be -- have to be cooperation and basic complimentarity (ph) here as we move forward. So you can't just say no, we are not going to do that, or, yes, we are going to jump in and do it.

You have got to do a little bit of it. You've got to build a very strong base, particularly within our diplomatic corps to be able to move forward and help these people in the different countries.

CROWLEY: Admiral Fallon, Ambassador Khalilzad, and of course, General Myers, thank you all, just a terrific conversation. I appreciate it.

MYERS: Thank you, Candy.

KHALILZAD: Thank you very much.

FALLON: Thanks.

CROWLEY: Up next, mid-term strategy from one man who led his party to two successful elections. Former Democratic National Committee Chairman Howard Dean is standing by.

(COMMERCIAL BREAK) CROWLEY: He was governor of Vermont, chairman of the Democratic National Committee, and a presidential candidate, and a man who speaks his mind. In the past year, Howard Dean has gone toe-to-toe with President Obama on some landmark issues. Dr. Dean was not a big fan of the Democrats' health care plan, especially once the public option was no longer an option.

In December, he wrote in The Washington Post: "This bill would do more harm than good to the future of America."

CROWLEY: In May, discouraged by the lack of movement on "Don't ask, Don't tell," Dean wrote a letter to the president, "The time to end 'Don't ask, Don't tell' is now. I urge you to take immediate action."

This week, Dean echoed the sentiments of several Republicans on the proposed mosque near Ground Zero.

(BEGIN VIDEO CLIP)

DEAN: I think another site would be a better idea.

CROWLEY: We will sit down with Howard Dean next to see what's on his mind now.

(COMMERCIAL BREAK)

CROWLEY: Joining me now from Burlington, Vermont is Howard Dean, former chairman of the Democratic National Committee and also former governor of Vermont.

And Vermont suits you, as we were just discussing. You look great.

(LAUGHTER)

(CROSSTALK) CROWLEY: I want to first just put up some numbers here, a poll that has recently been done by the AP, and it's an approval/ disapproval for the president.

On the economy, only 41 percent approve; immigration, just 39 percent of Americans approve; the budget deficit, 37 percent. Across the board on every issue we asked, the president is under 50 percent in approval for how he is handling that particular issue. What's happened?

DEAN: Well, the big question is where he is on approval in terms of like/dislike?

CROWLEY: People still like him.

(LAUGHTER)

DEAN: Yes, see, that's the thing. Look, I think that we are in tough times in America. We have got an unemployment rate that's over 9 percent. We have got, you know, people who are still making a zillion dollars on Wall Street while the average person thinks that they are doing great, and how come, since they were the ones that screwed up the economy, we're not -- we're where we are. There's a lot of resentment. It's a tough time.

But the key number is whether people still like the president or not, and I think they do. And I think that we are going to be in much better shape than most of the Washington pundits think we are, on the Democratic side. Because the president's out there fighting every day. This election, for better or for worse, depends on how hard the president fights between now and Election Day, and he shows every sign that he's really serious about this.

CROWLEY: But what we found, Governor, in at least some of the races that we have had so far, is the fact that the president, while people still like him, they don't approve of his policies and he doesn't have coattails. We're also finding now that there are certain Democrats that don't actually want him in their district because he's a drag.

DEAN: That's not a problem. Here is the deal. It's not the coattails. We know he doesn't have coattails from the '09 elections, the governor's race. What he does do is set the tone for the Democratic Party in a way that nobody else can.

Look, obviously, I am partisan about this. I think we have better candidates than the Republicans do. They have had some unfortunate people winning, in terms of the mainstream -- where the mainstream of America is, in some of their primaries.

But the -- so that's important. You've got to have better candidates. But the president sets the tone, and for the president to be out there fighting, as he has been for the last two or three weeks, and sounding like Harry Truman, people love that stuff. They want to see a fighter. They want to see strength in their leaders, and I think president Obama is showing that strength. That little speech about, if you want the country to go forward, you put the car in D, and if you want it to go backward, you put the car in R -- that stuff goes a long way. Inside the Beltway, people scoff at that stuff. People love that outside the Beltway. Because it is -- it's what you've got to stand for when you want to win. And he appears to want to win this.

CROWLEY: A lot of times, when you talk to either a Republican or a Democrat, if their party doesn't seem to be doing well, they say, well, it's messaging; we just haven't messaged things well.

I want to show you one more poll. It's actually one of our polls. It was on the health care bill and how people feel about it. Forty percent favor the now-passed health care law; 56 percent oppose it. Is it possible that people just don't like this health care bill?

DEAN: No. I think what really -- look, I don't like the health care bill. I would be one of the 56 percent who opposed it. But the fact of the matter is that it will work. We are going to make some progress.

I think Kathleen Sebelius is exactly the right person to be implementing this, with her background as an insurance commissioner and a governor.

So that's not what's the problem, though. It's not health care. You don't hear the Republicans talking very much about health care anymore. It's all about jobs and the economy. It's all about jobs and the economy and it's about the willingness of the Democrats to do something they don't do very well, but they are going to have to this time, and that's fight like hell and get out there and mean it.

CROWLEY: How bad do you think it will be this fall, in November? What are your predictions?

We've got the vice president who has said, if I could bet money on it, I would bet that we will keep the House and the Senate. Charlie Cook, who I'm sure you know, well-respected politico, who said he thinks it's going to be a wave election and that, in fact, the Republicans will take over.

Would you bet money on House Democrats staying in charge?

DEAN: I'd bet money on the Senate, for sure. The House is much tougher. I think, at the end of the day, we're going to win in the House and we're going to have a majority. It will probably be reduced to many -- perhaps as small as a five or 10-seat majority.

We simply have better candidates. And even the districts that are troublesome districts were very close, or we're going to -- I think, for example, Gabby Giffords will win in Arizona. I think Mary Jo Kilroy will win in Ohio. I actually think -- there's a young guy named Tommy Sowers, who's a Vietnam vet, who's going to knock off Jo Ann Emerson in Southeast Missouri, Rush Limbaugh's home district. He's just running a tremendous campaign. He's raised a lot of dough.

So we're going to have some pickups. We're going to have some losses. At the end of the day, I think we control both houses.

CROWLEY: Let me talk to you, a little bit, about the professional left. I don't know if you consider yourself as a member of the professional left that got skewered, a little bit, by Robert Gibbs.

(LAUGHTER)

But certainly, you have voiced, on "Don't ask, Don't tell" and on the health care bill, some of the real misgivings that the left has had about some of the things the president has done. And it boils down to this, this fall, do you think the left sits home or do you think the left goes out to the polls? And what gets them there?

DEAN: Well, look, I don't think that the left -- what Gibbs was talking about with the so-called professional left -- I don't know what he meant by that. You know, I think -- but that is a very small number of people. I think there are a large number -- I think that the people around the president have really misjudged what goes on elsewhere in the country, other than Washington, D.C.

I don't think this is true of the president, but I do think his people, his political people, have got to go out and spend some time outside Washington for a while. The average Democrat is a progressive. And, you know, there are some things that are upsetting about the kind of deals that were made by the president's people on health care.

But I think this is the time to put that stuff behind us. We've got to win this election. And we're going to have -- after the election is over, we'll go back to having our policy fights, but this is about winning. You cannot get anything done unless you have a Democratic president and a Democratic Senate and a Democratic House.

And the Republicans have proved it. They are the party of no. They haven't had a single constructive -- name one -- anybody who's watching this show, name one single constructive political initiative that the Republicans have put forward.

And when, finally, somebody did put forward one, Paul Ryan, he was lionized for three days and then abandoned by the Republicans because he wanted to privatize Social Security and Medicare. Name one thing that you could hope for from the Republicans if they should win this. That is not a winning strategy.

So all I can say to the Democrats is this is the time to put our differences aside, and let's get this job done and let's win and let's work like crazy and then we'll go back to our policy fights after the election is over and after we win it.

CROWLEY: Governor Howard Dean, it is always great to talk to you. Let's do it again. Thanks so much.

DEAN: Thank you.

CROWLEY: Up next, a check of the top stories, and then a rapper finds inspiration in the unlikeliest of places, a fight over a government nominee.

(COMMERCIAL BREAK)

CROWLEY: Time for a check of today's top stories. We have a new development on our top story. President Barack Obama plans a major speech on Iraq when he returns from his vacation in Martha's Vineyard. The speech will come as the last U.S. combat troops prepare to leave Iraq.

Israeli Prime Minister Benjamin Netanyahu said today that Middle East peace talks will only lead to a lasting deal if the Palestinians guarantee security and recognize Israel as the nation-state of the Jewish people. Netanyahu's comments come just two days after the U.S. announced that direct peace talks would resume.

Iran today unveiled the first military drone made in that country. The long-range unmanned aerial vehicle is capable of conducting bombing missions against ground targets and flying long distances at a high speed. The drone was unveiled in a ceremony marking Iran's Defense Industry Day.

In northern China, more than 94,000 people have been evacuated after heavy rains caused a river to breach its banks. The Yalu River remains a risk because more rain is expected in the region today. The river is on the border of China and North Korea.

Demonstrators are gathering in New York to protest plans to build an Islamic center and mosque near the site of the 9/11 terrorist attacks. The protests will take place Sunday from 11:00 a.m. Rain or shine, said the Coalition to Honor Ground Zero, which is organizing the rally. Firefighters, families of the September 11th victims, first responders, and residents of the neighborhood are expected to join the protests.

Shirley Sherrod will meet Tuesday with Agriculture Secretary Tom Vilsack to discuss a job offer. It will be the first face-to-face meeting between the two since Sherrod stepped down last month. The former Agriculture Department official was forced to resign when misleading and incomplete video footage of a speech she gave created a media firestorm.

And those are your top stories here on "State of the Union."

Up next, a rap that busts some rhymes for a new government watchdog.

(COMMERCIAL BREAK) CROWLEY: Music and politics go way back. Beethoven originally called his 3rd Symphony "Bonaparte" because he admired Napoleon and the principles of the French revolution. But then Napoleon called himself emperor, and Beethoven took it back.

We don't think this has the same power of Beethoven's 3rd, but it's music and politics 2010.

(BEGIN VIDEOTAPE)

CROWLEY: Call it niche political music. A rap song in praise of Harvard professor Elizabeth Warren.

CROWLEY: Wall Street doesn't like Warren, but if the president nominates someone else, he'll infuriate people on his left flank. People like Terry O'Neill, head of the National Organization for Women, who lit into Treasury Secretary Geithner for not supporting Warren.

"There is a no girls allowed attitude going on around there," the NOW president said. "It is notoriously sexist and misogynist. It's a combination of attitude and anatomy that is making the old boys want to block her. She doesn't look like them, and more importantly, she doesn't think like them."

Set that to music.

Thanks for watching "State of the Union." I'm Candy Crowley in Washington. For our international viewers, "World Report" is next. For everyone else, "Fareed Zakaria: GPS" starts right now.